Huazhu plans on doubling down on midscale and luxury segment.
China’s Huazhu Hotels Group has ambitious plans for 2020 and beyond which include expanding footprints in the mid and upscale segments.
Chinese hotel group Huazhu has big expansion plans for the next five years and its vision involves expanding its portfolio of midscale and luxury brands.
We find out more.
Huazhu on an upward trajectory
Chinese hotel group Huazhu is hitting the big time this decade, with huge plans for expansion across several sectors.
Huazhu already has a solid back catalogue of economy brands, but their vision for the future involves getting a stronger foothold in the midscale and luxury segments of the hospitality market.
The company hit a milestone recently with 5,000 hotels under their belt, and it plans to get to 10,000 within the next five years.
Statistics for the beginning of the year showed that Huazhu’s bread and butter segment, the economy range of brands, now only accounts for 37% of its stock, while the remaining 63% of its pipeline is made up of mid and upscale hotels.
A finger in every pie
The company made a shrewd move last year with the acquisition of Deutsche Hospitality. Buying the organisation gave Huazhu “rich brand platforms in each segment up to the luxury and upper-upscale segments,” according to Huazhu founder Ji Qi, laying the foundations for the Chinese hotel group to further expand into these markets.
Bolstered by this potential expansion, this year Huazhu is set to grow its portfolio of hotels by around 1,700, which will build on the company’s addition of over 450 hotels in the final quarter of 2019.
The acquisition of Deutsche Hospitality means that now 96% of Huazhu’s stock can be found in China, and 79% of the group’s luxury and upscale stock can be attributed to the acquisition.
Huazhu also has a franchise agreement with Accor for the Grand Mercure, Novotel, Mercure, Ibis and Ibis Styles brands, so it is keeping its options open when it comes to every facet of its business.
A fast learning curve
Ji Qi said, “With Huazhu’s strong position in the midscale and economy segments, I’m now thinking to capture the opportunity, as the next wave for the luxury and upscale segment. I think it will take an even longer time for us to build a new luxury and upscale brand from scratch. Because these brands require richer stories and service qualities, that’s why we choose to enrich our luxury and upscale brand portfolio through acquisition.”
“This will help to shorten our own learning period, and we will benefit from the new perspective of our employees in a newly-acquired business. Our recently announced acquisition of Deutsche Hospitality is a perfect service fit for our luxury and upscale brands,” Ji Qi elaborated.
The unique and varied Deutsche Hospitality portfolio includes the Steigenberger Hotels & Resorts, Jaz in the City and IntercityHotels brands. Deutsche Hospitality was acquired by Chinese hotel operator and franchisor Huazhu Group in January 2020.
